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Tuesday, August 7, 2012

Geithner, Treasury drove cutoff of non-union Delphi workers’ pensions

Emails obtained by The Daily Caller show that the U.S. Treasury Department, led by Timothy Geithner, was the driving force behind terminating the pensions of 20,000 salaried retirees at the Delphi auto parts manufacturing company.

The move, made in 2009 while the Obama administration implemented its auto bailout plan, appears to have been made solely because those retirees were not members of labor unions.

The internal government emails contradict sworn testimony, in federal court and before Congress, given by several Obama administration figures. They also indicate that the administration misled lawmakers and the courts about the sequence of events surrounding the termination of those non-union pensions, and that administration figures violated federal law.

Delphi, a General Motors company, is one of the world’s largest automotive parts manufacturers. Twenty thousand of its workers lost nearly their entire pensions when the government bailed out GM. At the same time, Delphi employees who were members of the United Auto Workers union saw their pensions topped off and made whole.

The White House and Treasury Department have consistently maintained that the Pension Benefit Guaranty Corporation (PBGC) independently made the decision to terminate the 20,000 non-union Delphi workers’ pension plan. The PBGC is a federal government agency that handles private-sector pension benefits issues. Its charter calls for independent representation of pension beneficiaries’ interests.

Former Treasury official Matthew Feldman and former White House auto czar Ron Bloom, both key members of the Presidential Task Force on the Auto Industry during the GM bailout, have testified under oath that the PBGC, not the administration, led the effort to terminate the non-union Delphi workers’ pension plan.

“As a result of the Delphi Corporation bankruptcy, for example, Delphi and the Pension Benefit Guaranty Corporation were forced to terminate Delphi’s pension plans, which means there are Delphi retirees who unfortunately will collect less than their full pension benefits,” Feldman testified on July 11, 2012.

The emails TheDC has obtained show that the Treasury Department, not the independent PBGC, was running the show.

Under 29 U.S.C. §1342, the PBGC is the only government entity that is legally empowered to initiate termination of a pension or make any official movements toward doing so.